3 underrated cybersecurity actions critical for the future

With more and more frequent cyberattacks, cybersecurity is paramount. In this music video for “Ask Us Anything” on Motley Fool live, recorded on May 5Fool.com contributor Nick Rossolillo discusses three companies that are becoming big players in the industry.

Nick Rossolillo: It is a new company and it is growing rapidly. And it’s like the shiny object that attracts investors, isn’t it? Oh, IPO! That’s more than doubling revenue every year! AI, cloud-native. I want to buy it! So, right? that’s why Crowd (CRWD -5.96%) gets the premium, I think. A very large premium beyond its peers.

Fortinet (FTNT -4.32%), Palo Alto (PANW -7.33%)some other companies do that kind of stuff too. ZScalerNameit is (ZS -9.66%) another too. They don’t deal with endpoint security. They are more like cloud and web-based security. So it’s a different product. Often it will be associated with something like Crowdstrike. So, as your endpoint is secure, then as your cloud platform is secure.

One area where Fortinet and Palo Alto Networks are overlooked is that you still need to have firewalls as part of a security architecture because many companies still have physical assets that need to be protected. And specifically with the cloud, I’ll mention this in particular: we think of the cloud as this nebulous thing that, you know, doesn’t actually exist anywhere. Like we display it on our phones and our computer and there it is. But at some point, there is a physical asset there. There is a data center that hosts this information, this application that we access, this service that we use. There’s a data center somewhere where this is hosted, and you need to protect it.

And that’s where Fortinet’s growth has come from for years, but especially right now, they’ve seen a big increase in their product sales because of the expansion of that data center network. Many companies are upgrading their data centers, so they need to change hardware, including firewalls. And Fortinet also has a nice flywheel for them too, where you know, they’re selling hardware, but they also have cloud-based software to go along with it.

So, you know, they’re selling the product, but they’re also selling the service. And so you kind of get a nice virtuous cycle for companies like Fortinet and Palo Alto Networks. So it’s not just Crowdstrike that’s benefiting from the secular growth trend. Some other companies also benefit.

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